Can we keep a credit card without using it?

Can You Keep a Credit Card Without Using It?

The allure of a seemingly passive credit card, tucked away in a drawer, might seem harmless. After all, it’s not actively drawing a paycheck, right? However, keeping a dormant credit card can have more significant consequences than simply gathering dust. While seemingly benign, inactivity can impact your credit health and potentially expose you to financial risks.

The primary concern with a dormant credit card is the risk of account closure. Credit card issuers often close inactive accounts to streamline their operations and minimize the administrative burden of maintaining inactive records. This closure, even if seemingly minor, can have a tangible effect on your credit score. Credit bureaus often assess the number of open accounts you have as part of their creditworthiness calculation. Closing a card significantly reduces this number, and even a brief period of inactivity can trigger a closure.

Beyond account closure, the lack of use also raises the spectre of fraudulent activity. While a card might not be used actively, it still exists as a point of entry into your financial history. If a card holder’s details are compromised, the potential for unauthorized charges on a dormant card is significant. This can lead to not only financial loss but also the time-consuming and frustrating process of dispute resolution and recovery.

Moreover, the seeming inactivity can mask underlying issues like missed payments. A dormant card that accumulates late fees – even if they’re not directly impacting your usage – can still negatively influence your credit report. The card’s performance is, after all, part of your credit history. This seemingly simple oversight can have repercussions that affect your ability to secure loans, rent an apartment, or even obtain a new credit card in the future.

Finally, the simple act of monitoring your dormant credit cards is a crucial security measure. Reviewing your credit card statements, even for an inactive account, allows you to identify any unusual activity. A dormant card may serve as a useful, easily accessible tool for tracking your credit score and ensuring everything is accurate. This proactive approach can head off potential problems before they escalate into more significant financial issues.

In conclusion, while seemingly innocuous, keeping a dormant credit card isn’t without its drawbacks. The risk of account closure, fraudulent activity, and potential impact on your credit score outweighs the minimal perceived benefits. Regularly monitoring these accounts, even for inactive cards, is a vital part of responsible financial management and protecting your credit health. If you no longer need a credit card, closing it is often the best course of action to avoid these potential issues.